Archive for March, 2014

March 28th, 2014 Comments Off on Can you get a degree in Football? Well, maybe you should?

“Everybody’s talkin’ at me, I don’t hear a word they’re saying.” Harry Nilsson said that. You think he was talking about the NLRB and Northwestern Football? Neither do I, but I like the song. In case you have not guessed, we are taking a bit of a break from the FLSA series.

So, as you have all heard, the Regional Director of Region 13 of the NLRB has decided that “grant in aid scholarship football players at Northwestern University are employees entitled to organize and collectively bargain under the National Labor Relations Act.” It’s everywhere. ESPN is talking about it. CNN is talking about it. The New York Times is talking about it. Why this happened and what it means will be debated until ultimately the Supreme Court of the United States decides the issue and yes, that is what probably is going to have to happen. And what is really sort of funny about the whole thing is, by the time this is all settled, years from now, all of the Northwestern players who are pushing for this will have long since graduated.

So what exactly did the Regional Director discover that led him to believe after 145 years (according to Wiki, the first college football game was played between Rutgers and Princeton in 1869) that college football players are “employees”? Well, the first thing he decided was that the appropriate definition for determining who an employee is under the NLRA was the “common law” definition of employment. According to the Regional Director, “Under the common law definition, an employee is a person who performs services for another under a contract of hire, subject to the other’s control or right of control, and in return for payment.” Northwestern University, Case 13-RC-121359 (2014). I’m not going to get into whether this is the right test, I don’t think it is, but it is the one he used. Then he basically found the following:

The scholarship football players perform a service which benefits the university and they are compensated for it with a scholarship.

The tender of the scholarship to the players and the acceptance to play football in exchange for the scholarship amounts to a contract for hire.

The scholarship players are under the control of the University for the entire year at the risk of losing their scholarship.

Id.

The Regional Director then went on to dismiss the University’s argument that the NLRB’s decision in Brown University, 342 NLRB 483 (2004) governed because, unlike the grad students in Brown that the Board found were not employees, football players spend a lot of time, not a “limited number of hours” performing their “duties” as players, football is not a “core element” of the degree program like teaching is for grad students, football coaches are not “members of the faculty” like supervisors were in Brown, and grad students’ pay in Brown was “financial aid” not pay for services performed.

So what next? Well, this is not the end. As I mentioned above, this is going to be appealed and it will be going on for a long, long time before there is any final decision. So what does Northwestern do between now and then? How about offer a degree in Football? Yes, I said it, offer a degree program in Football. Why not? What do we hear over and over again? “These football players aren’t really in school to get a degree, they are just preparing for the NFL.” OK, if that is true then prepare them like you would for any other job. Give them a degree. Kills two birds with one stone. First, it takes care of the hypocrisy of calling a student athlete a student when all he is really trying to do is get into the draft. Now he is working toward a degree that will help him in his chosen profession (OK, that’s reaching a bit). And, at the very least, it takes care of the Director’s issues, doesn’t it? Practice is now a class in “Offensive Line Blocking Theory” or “Route Running 305.” Film study is a 3 credit class called “The Theory of Football.” Only games and travel aren’t classes now. So that would be what? How about a “limited number of hours on their duties” like the grad students in Brown. Football isn’t a core element of the academic program? Well, if I’m trying to get a degree in Football it is, now isn’t it? And those coaches that aren’t members of the faculty, they are now. The strength coach, he is teaching my “Weightlifting” class. And the head coach, he is now teaching things like “Leadership On and Off the Field: Theory and Practice” or “Basic Coaching 101.” Oh, and those scholarships that the Director called “pay for performance of a service?” Not anymore. Now they are just financial aid so I can work toward my degree in Football. We can even wrap this up in a nice little bow if we can talk the NFL and NFLPA into putting a degree requirement into the next CBA. And you know what? It will work for basketball too.

Ridiculous you say? Crazy you say! Who would take a Football degree you say? Football players, that’s who. And what reputable university is going to offer a degree in Football or Basketball? How about all of them. You tell me, how is playing football for a major university any different than playing the oboe in a university orchestra? That’s right, the oboe. Northwestern happens to have a very good music program that offers degrees in everything from Conducting and Ensembles to Voice and Opera. They offer Music Theory and Music Composition. They offer undergraduate and graduate degrees and students have to audition to get into the Bienen School of Music to . . . play the oboe.

The Audition and Program Requirements Guide for the 2013-2014 academic year is 19 pages long and requires aspiring oboe students to perform “Suggested Solo Selections such as Concerto by Cimarosa, Marcello, Handel, Mozart, or Vivaldi” among other requirements. I’ll bet some of these students perform in concerts and I’ll bet some of these concerts are after hours and even on Saturdays. Sounds like a football game. I’ll bet the University even charges admission for some of these shows so they are getting a monetary benefit. Sort of like football tickets. And I’ll bet, if we looked hard enough, we could find some rich old person who donates a boat load of money to the University because he or she likes the orchestra. Except for the dollars that change hands, not so different from football, now is it? Oh, and by the way, according to Northwestern’s literature,

The Bienen School of Music offers merit-based scholarship grants to students who have presented exceptional applications and auditions. These grants are based upon musicianship, scholarship, leadership and a demonstrated personal commitment, as well as on departmental needs. We award over $4 million annually to the students in our graduate programs.

So at least at the graduate level, these kids are getting paid to come to school too. To Play The Oboe. And I don’t hear anybody calling the best oboist at Northwestern an employee.

So problem solved, Northwestern, offer a BA in Football. Oh, and by the way, before you tell me there are no jobs for people with a football degree, in 2011 there were about 1,700 professional football players in the NFL. And that does not include jobs as coaches, trainers or talking heads on TV and radio. According to Wiki, in 2007 there were 117 U.S. orchestras with annual budgets of $2.5 million or more (that is just a bit more than one year’s pay for the average NFL player). According to Wiki Answers, the average orchestra has three or four oboists. If my math is right, that is 468 full-time oboists in big-time orchestras. I like the odds in football better.

Now before you all get all worked up, yes, I’m kidding, but only sort of. You see, Northwestern should not have to be making these decisions and we should not have to be talking about whether college football players are employees. Yes, the University makes a lot of money from football and basketball, and yes, because of stupid and I mean stupid, NCAA rules, players sometimes have to scrimp or break those rules to get by while the University makes a lot of money, but two wrongs don’t make a right. Don’t like the NCAA rules and think they should be changed? Good for you, work to change them. Big universities with a lot of power like those in the Big 10, for example, are eventually going to tell the NCAA to drop dead and drop out anyway. Should big‑time programs provide health care for these players? Yes probably and that, by the way, may end up being one of the unintended consequences of this decision. So, if we change football to a degree program, do we get out from under these NCAA rules? Does the NCAA govern academic scholarships? I don’t think so.

But that is not what this blog is all about nor is it why this decision came down the way it did. In my opinion, this decision did not come down the way it did because anyone really thinks these kids are employees of the University. It came down the way it did because the NLRB continues to reach beyond what it has traditionally done and unions are trying to stay relevant. Don’t forget, in their heyday, unions represented about 35% of the private sector workforce, whereas today that number is about 6%. Unions even have trouble winning elections when the employer stays neutral and wants the union. Just look at what happened to the UAW in Tennessee recently. And this is just the latest headline in what has been a constant stream of headlines highlighting this continued effort by the NLRB to expand its reach. Let’s just look at the last couple of years: First the NLRB GC issues a series of memorandums dealing with social media in the non-union workforce, extending Section 7 protections way past what anyone envisioned them to be. Seems the GC thinks that companies can’t even control the use of their own logo. Then the Board reaches well beyond its authority and tries to implement a poster requirement which has to be knocked down by the courts. The Board continues to try to apply its D.R. Horton decision despite several courts rejecting its logic. And the Board has even issued complaints claiming that the most common provision in any employee handbook, the at-will provision, is an unfair labor practice.

So if all of this is going on and you are a union, you hitch your wagon to some disgruntled college kid and try to make headlines. Oh, and one final thing: I think it is interesting that one of the things the spokespeople for this particular union claims is that football interferes with academic success. Maybe at some schools, but Northwestern? According to the Regional Director’s decision, Northwestern players have cumulative GPAs of 3.024, graduate at a 97% rate and have an Academic Progress rate of 996 out of 1000. Making Northwestern the most academically successful Division 1 football program in the United States.

Maybe that is exactly why these kids think they need a union. Seems at Northwestern they actually have to go to class.

March 21st, 2014 Comments Off on Who? What? When? Really, there’s a reg for that?

I told you last time (which was two weeks ago because we got interrupted by the President, who has not called me for help yet by the way) that this time we were going to talk about some odds and ends and spend a little time talking about some recordkeeping requirements and that is just what we are going to do. So this will be a pretty short post and off to the weekend we go. And speaking of the weekend, I saw a bumper sticker the other day that said “Unions, the people that brought you the weekend.” What a bunch of bologna. According to Wikipedia:

The first five-day workweek in the United States was instituted by a New England cotton mill in 1908 to afford Jewish workers the ability to adhere to the Sabbath. In 1926 Henry Ford began shutting down his automotive factories for all of Saturday and Sunday. In 1929 the Amalgamated Clothing Workers of America Union was the first union to demand a five-day workweek and receive it. After that, the rest of the United States slowly followed, but it was not until 1940, when a provision of the 1938 Fair Labor Standards Act mandating a maximum 40 hour workweek went into effect, that the two-day weekend was adopted nationwide.

So a New England cotton mill invented the weekend because it wanted to be religiously tolerant and Henry Ford standardized it so all of his employees could enjoy their new cars, inventing the weekend and the car culture of the US all at the same time and then the federal government with our very own FLSA standardized it. Some union, jumping on the band wagon, does not give them the right to claim credit for the weekend.

And with that happy aside, on with the first odd and end. Those of you that are following along with the regulations will notice that we skipped a section. In fact we skipped it some time ago. Yes, there is an entire section of the regulations, four different regulations, on when you have to pay an employee for sleeping. That’s right, sleeping. Now I spent a good part of my pre law school working life sleeping on the job and some people think I still am, so let’s talk about when you have to pay your employees for sleeping. So what is the general rule?

Under certain conditions an employee is considered to be working even though some of his time is spent in sleeping or in certain other activities.

29 CFR § 785.20.

And exactly what might those certain conditions be, you ask? Well, I’m glad you asked. First, where an employee is required to be on duty for 24 hours or more, he may get paid for sleeping.

Where an employee is required to be on duty for 24 hours or more, the employer and the employee may agree to exclude bona fide meal periods and a bona fide regularly scheduled sleeping period of not more than 8 hours from hours worked, provided adequate sleeping facilities are furnished by the employer and the employee can usually enjoy an uninterrupted night’s sleep. If sleeping period is of more than 8 hours, only 8 hours will be credited. Where no expressed or implied agreement to the contrary is present, the 8 hours of sleeping time and lunch periods constitute hours worked.

29 CFR § 785.22.

If the sleep period is interrupted, then the time that the employee is actually working must, of course, be paid. As an enforcement policy, if the employee can’t get at least 5 hours of uninterrupted sleep during the scheduled sleep period then the entire time is working time that must be paid.

What about an employee that works at home?

An employee who resides on his employer’s premises on a permanent basis or for extended periods of time is not considered as working all the time he is on the premises. Ordinarily, he may engage in normal private pursuits and thus have enough time for eating, sleeping, entertaining, and other periods of complete freedom from all duties when he may leave the premises for purposes of his own. It is, of course, difficult to determine the exact hours worked under these circumstances and any reasonable agreement of the parties which takes into consideration all of the pertinent facts will be accepted.

29 CFR § 785.23.

Enough about sleep, what are the other odds and ends? I’m just going to give you the regs on these because they are pretty much self-explanatory.

§785.42 Adjusting grievances.

Time spent in adjusting grievances between an employer and employees during the time the employees are required to be on the premises is hours worked, but in the event a bona fide union is involved the counting of such time will, as a matter of enforcement policy, be left to the process of collective bargaining or to the custom or practice under the collective bargaining agreement.

§785.43 Medical attention.

Time spent by an employee in waiting for and receiving medical attention on the premises or at the direction of the employer during the employee’s normal working hours on days when he is working constitutes hours worked.

§785.44 Civic and charitable work.

Time spent in work for public or charitable purposes at the employer’s request, or under his direction or control, or while the employee is required to be on the premises, is working time. However, time spent voluntarily in such activities outside of the employee’s normal working hours is not hours worked.

§785.45 Suggestion systems.

Generally, time spent by employees outside of their regular working hours in developing suggestions under a general suggestion system is not working time, but if employees are permitted to work on suggestions during regular working hours the time spent must be counted as hours worked. Where an employee is assigned to work on the development of a suggestion, the time is considered hours worked.

And what about those recordkeeping requirements I mentioned? First, they hold that if there are “insubstantial or insignificant periods of time beyond the regular scheduled working hours which can’t be precisely recorded for payroll purposes, they can be disregarded.” The reg says “such trifles are de minimis.” The problem with this particular regulation is that it is not clear if or when it ever applies. For example, the regulation cites a case called Glenn L. Martin Nebraska Co. v. Culkin, 197 F2d 981, 987 (8th Cir. 1952) cert denied 344 US 866 (1952) for the proposition that working time that amounted to $1 of additional compensation per week was not “a trivial matter to a workingman” so it was not considered de minimis under this regulation. Now that was back in 1952 when you could actually buy something for $1 so it is not clear if the same rule would apply today. On the other hand, there are much more accurate systems for keeping time now, so smaller increments of time might not be considered de minimis.

So, that’s it for hours worked. It is not everything, but it’s enough, don’t you think? Next week we are going to talk a little bit about the minimum wage even though most of my clients pay more than the minimum. Then, on to overtime.

March 14th, 2014 Comments Off on Mr. President, You want to fix overtime? Good, but please fix it all!

We are going to take a break in our regularly scheduled program to talk about President Obama’s announcement yesterday regarding overtime. In a Memorandum to the Secretary of Labor issued yesterday, the President directed the Secretary to update regulations regarding who qualifies for overtime protection.

In so doing, the Secretary shall consider how the regulations could be revised to:

• Update existing protections in keeping with the intention of the Fair Labor Standards Act.

• Address the changing nature of the American workplace.

• Simplify the overtime rules to make them easier for both workers and businesses to understand and apply.

Now that seems like a really good idea to me. But let’s do a little experiment here and see if the DOL or even the White House reads my blog. If I get a call, well . . . .

Mr. President, please don’t just go halfway. Mr. Secretary, seems like the President asked you to simplify the rules for both “workers and business to understand and apply” them. Please, let’s not forget business here.

What am I talking about? Let me tell you. All of the press I have seen on this, and even the White House Fact Sheet that I cite above, has focused on one side of what the President seems to think is the problem. Over and over we have heard that this effort is aimed at the fast food manager who supervises a crew and who works 60 hours a week and who makes $23,660 per year. Where do I get that number? That is the annual salary you need to make under the current regulations to be considered exempt. It’s called the salary basis test and you can find it at 29 CFR § 541.600, and it is $455 per week. The White House, in its Fact Sheet, is squarely focused on these people:

For example, a convenience store manager or a fast food shift supervisor or an office worker may be expected to work 50 or 60 hours a week or more, making barely enough to keep a family out of poverty, and not receive a dime of overtime pay. It’s even possible for employers to pay workers less than the minimum wage per hour.

And you know what? I’m not going to argue that this system does not need to be fixed for these people. It does. It makes complete sense to me that an employee who is called a manager (or even a supervisor) should not work full time and still be below the poverty line for a family of 4. I agree, that is not right.

But that is only half the equation. We have an equal number of people, maybe even more, who want to be exempt but can’t be. They work in an office, they don’t supervise anyone, they don’t fall into the definition of “professionals” under the white collar exemptions and they can’t be considered exempt. Let’s use IT Help Desk people as an example. There are plenty of others, like paralegals, or mortgage loan originators. All these people make way more than $455 per week, so why can’t they be considered exempt? Because they don’t, according to the Department of Labor, meet the “duties test.” And they don’t make the $100k per year to be considered “highly compensated.” See, that is the other side of the coin. If our fast food manager is put upon because of his salary and is being abused by the number of hours he is required to work, these folks are equally being abused by a system that does not allow them to be considered exempt employees which is exactly what they want to be and exactly what companies want them to be. They want the certainty of being paid a salary. When they miss a day of work, they want to get paid. They are not being abused by being made to work 60 hours a week. Frankly, they want the prestige of being considered “salaried.” (And before you tell me that an employer can still pay these folks a salary if he wants, he just has to pay overtime, I know that. I know all about salaried non-exempt employees. It doesn’t work.) Don’t believe me, Mr. President? Send somebody out to ask them. I’ll bet 95% of these people want to be what they call salaried and what we call exempt. So why can’t they? Now this is not the first time I have written about this. You can see it here. Seems I’m ahead of my time.

So Mr. President, Mr. Secretary, I applaud your passion for fixing this antiquated law, but are we just going to go halfway? Or are we really going to try to fix this outdated set of rules that does not work in today’s workforce? And are we going to try to do it in a way that is fair for and advantageous for everyone: including businesses that don’t abuse their employees? They need your help too. Or is it just going to be fast food supervisors?

Oh, and by the way, do you want some help? If you do, please give me a call, I have some ideas.

Let’s talk about travel time. We have already dealt with some of these issues including the Portal-to-Portal Act and its effect on travel time. So there is the general rule according to the Regulations: “The principles which apply in determining whether or not time spent in travel is working time depend upon the kind of travel involved.” 29 CFR § 785.33. What else the employee is doing while he is traveling, where he is traveling and why he is traveling also affect whether the travel time is compensatory. First and foremost, the Regulations are very clear that ordinary commuting time is not working time thanks to the Portal-to-Portal Act.

An employee who travels from home before his regular workday and returns to his home at the end of the workday is engaged in ordinary home to work travel which is a normal incident of employment. This is true whether he works at a fixed location or at different job sites. Normal travel from home to work is not work time.

29 CFR § 785.35. Even where the travel time is really long, if it is ordinary home to work travel it is not work time. For example, in Vega v. Gasper, 36 F3d 417 (5th Cir. 1994), the court determined that travel time of four hours per day on buses supplied by the employer to and from the worksite was not compensable working time. The court found important that there was no work performed before or on the ride, the employees didn’t carry or load tools, the employees got information during the ride but it was personal, like pay rates, rather than work-related, the employees were not required to use the bus and they chose where to live and how to get to work. But, in Dooley v. Liberty Mutual Life Insurance Co., 307 F.Supp 234 (D. Mass 2004), a claims adjuster performed administrative tasks at home before and after his first and last trip to the field for the day. The court found that these administrative tasks were integral to his work so the travel was part of a “continuous work day” and the travel time was compensable.

So what do the Regulations say about when travel time is working time? Here is what they say:

Home to Work in Emergency Situations

When an employee has completed his normal day’s work and is called upon to travel a substantial distance to perform a special job at the request of his employer, the resulting travel time must be counted as hours worked. 29 CFR § 785.36.

Home to Work on Special One Day Assignment in Another City

When an employee who normally works in a fixed location is given a special one day assignment in another city, the resulting travel time must be counted as hours worked. For example, an employee who lives in Grand Rapids, Michigan with regular working hours from 9:00 a.m. to 5:00 p.m. is given a special assignment to work in Detroit with instructions to leave Grand Rapids at 8:00 a.m. on the train. He arrives in Detroit at 11:00 a.m. ready for work. The special assignment is completed by 4:00 p.m. and the employee arrives back in Grand Rapids at 7:00 p.m. Because this travel is performed for the employer’s benefit at his special request to meet the needs of a particular and unusual assignment, it would qualify as an integral part of the principle activity which the employee was hired to work on that workday and it is, like travel involved in an emergency call, or like travel that is all in a day’s work, considered time worked.

All the time involved, however, may not be counted since, except for the special assignment, the employee would have had to report to his regular work site to travel between his home and the railroad depot to take the train to Detroit may be deducted as being in the home to work category. Also, normal meal periods may be deducted. 29 CFR § 785.37.

Travel that is All in a Day’s Work

Time spent by an employee in travel as part of his principle activity, such as travel from job site to job site during the work day, must be counted as hours worked. For example, an employee is required to report at a meeting place to receive instructions or to perform other work there or to pick up and carry tools and travel from the designated place from the workplace, that is all work that is all in a day’s work and must be compensated. 29 CFR § 785.38.

Travel Away From the Home Community

Travel that keeps an employee away from home overnight is considered travel away from home. Travel away from home is work time when it cuts across the employee’s normal workday. This is true even when the travel time occurs on the weekend. For example, if the employee’s normal workday is 9:00 a.m. to 5:30 p.m. and the employee is traveling between the hours of 9:00 a.m. and 5:30 p.m. even on a Saturday or Sunday, the time must be considered hours worked and must be compensated. A regular meal period time may be deducted. Time spent outside the normal work hours as a passenger on an airplane, train, boat, bus or automobile is not considered hours worked and need not be counted. 29 CFR § 785.39. If the employee is required to drive, all time spent driving is hours worked and must be compensated.

Travel by Automobile Away From the Home Community

If an employee is offered public transportation but requests permission to drive instead, the employer can count as hours worked either the time actually spent driving the car or the time the employee would have spent traveling had he taken the public transportation. 29 CFR § 785.40.

That’s what they say, and now you know. Next week we will wrap up working time with some odds and ends and throw in some recordkeeping requirements before we move on to the exciting world of Overtime!

About

Steven Palazzolo brings a unique and varied background to the practice of labor and employment law. Prior to attending law school, Steve spent seven years as a shop floor supervisor in both union and non-union food processing plants. Steve also spent 11 years as in-house counsel specializing in labor and employment law for a multi-billion-dollar multinational corporation with extensive manufacturing operations. During this time Steve also supervised a staff of HR professionals. Steve represents employers, emphasizing counseling clients on employee relations issues, policy development, NLRB, ADA, FMLA and international labor relations. Steve has experience in acquisitions, immigration, employee benefits, campaign finance, employment litigation, civil rights and related issues, and has provided counsel to companies in the agricultural, food processing, hospitality, manufacturing and marketing industries in the United States, South and Central America, Europe and Asia. He currently provides counsel to a variety of leading Midwest businesses.

Don’t forget, this blog is for informational purposes only and is not intended to provide legal advice. You should not act based solely on the contents of this blog. The answers to legal questions often depend upon the specific matter at hand. If you have a legal question, contact your lawyer. For more information or a consultation contact spalazzolo@wnj.com.